A year after the June 1998 U.S.-China summit, progress in the relationship has ground to a near standstill. Premier Zhu Rongji's recent visit to America was plagued by allegations of nuclear espionage and human rights abuses and failed to close the deal on World Trade Organization (WTO) membership for China. The annual bilateral trade imbalance stands at $60 billion and is growing; China could become the United States' largest deficit trading partner in 1999. Tragic memories of the 1989 Tiananmen crisis linger. The accidental bombing of the Chinese embassy in Belgrade inflamed an already irritated Chinese opposition to U.S.-led action in Yugoslavia. Worst of all, the highly politicized atmosphere over China policy in Washington muddies the clear-headed thinking so critical to stabilize this important but turbulent relationship. Instead, ties consist of little more than mechanistic negotiations and microissues. What happened to the "constructive strategic partnership" professed by the two sides just a year ago?

For the United States, progress in relations with China depends on two factors, neither of which has received the regular, sustained focus required: a clear understanding with China about the two countries' strategic interests and differences and a domestic consensus in support of those understandings. Both of these pillars have been absent for at least ten years and probably more. Without them, U.S. China policy will remain unable to move beyond the mantra of engaging -- a process, not a policy objective in itself -- toward setting well-defined, realistic goals with China and then gaining the domestic support to achieve them. Ten years past the Cold War, entering a far more complex international era, the United States can ill afford to let China policy drift any longer.

There is nothing amiss with engagement per se. Realistic dialogue lays the groundwork for progress in the relationship. Alternative courses, from unilateral sanctions to containment to confrontation, are neither wise nor feasible. China looms ever larger on the international scene as an economic engine, a political force, a military power, and an environmental bombshell. The United States should concentrate on shaping these potentially destabilizing developments in ways favorable to U.S. interests. Indeed, engagement has already opened China to enormous changes of great benefit to the United States: nascent democratization, embrace of the market, and steady acceptance of international norms -- all processes to be encouraged, not ignored. One need only recall Maoist China little more than two decades ago -- fanatical, revolutionary, autarkic, appallingly repressive -- to understand how much closer China has come to practices consistent with U.S. interests.

Only the most stalwart isolationists argue that engagement with China is wrong. The real questions are, engagement for what purpose? And can those ends garner widespread support at home? These questions have not been seriously discussed in Washington. Until they are, the relationship will move around in circles, with each side increasingly frustrated and wary. Before matters get any worse, it is time the two sides stop to consult a map.

THE TIANANMEN EFFECT

U.S. policy in the early 1990s was spared the task of forging a new strategic direction with China and assembling a domestic consensus to sustain it. It remained plausible well into the late 1980s to espouse the Nixon-Kissinger notion of the Sino-Soviet-U.S. strategic triangle and the corresponding need for Washington to cultivate Beijing as a counterweight to Moscow. Many China hands look to the late Reagan years as a high point in U.S.-China strategic ties; the two sides shared intelligence, military cooperation peaked, and U.S. defense contractors sold weapons and technology to the People's Liberation Army.

The tragic events of Tiananmen Square, combined with communism's demise in Europe and the Soviet Union's collapse, dramatically changed all that. These events not only spotlighted the Chinese Communist Party's harsh rule but also decisively ended any lingering ideas about strategic partnership with China. Regular ties between the two countries were cut off. For most of the early 1990s, memories of Tiananmen hung heavily over the relationship, making any new strategic understandings with Beijing out of the question in Washington policymaking.

When the two sides exchanged summits in October 1997 and June 1998, it had been 12 years since a Chinese leader had made a state visit to the United States and more than 9 years since a U.S. president had traveled to China. Emerging from those meetings was a bilateral declaration of progress toward a "constructive strategic partnership," a phrase that has since come to haunt the relationship. It has never been clear to Americans just what is being built with the Chinese and why, or more important, what is impossible to achieve given contrasting national interests. Lacking those understandings, the relationship flounders and falls prey to both exaggerated expectations and gloomy pessimism.

COMMON GROUND

Even in these troubled times for the bilateral relationship, both sides share a number of economic, security, and political goals. At a minimum, they should avoid strategic misperceptions that could lead to conflict and instead work in tandem to strengthen stability and encourage economic development.

What China craves most is a peaceful domestic and regional environment conducive to its sorely needed social and economic development. The United States is in the best position to offer or obstruct this. The United States can influence the Persian Gulf oil supply, encourage nuclear restraint in South Asia, help revitalize Asian economies, and restrain North Korea's brinkmanship. Given its wealth and experience, the United States can offer some of the best hands-on assistance to China in liberalizing its politics and economics, introducing the rule of law, and making its financial system more stable and accountable. But the United States can also bring singular pressure to bear on China in trade negotiations, encourage Taiwan's autonomy, and bolster Japan's military capability. On the other hand, China has the greatest potential to support or disrupt U.S. interests in East Asia, from achieving reconciliation on the Korean peninsula to maintaining economic growth in the region to avoiding conflict across the Taiwan Strait.

China and the United States share an interest in limiting the spread of Islamic fundamentalism, particularly in southwestern and central Asia. Both sides want Russia to manage its troubles benignly and Japan to continue stabilizing the region. Moreover, both would benefit if China had a greater stake in the success of institutions and regimes that foster global order and economic growth. That would mean cooperating to support the United Nations, the World Trade Organization, the International Monetary Fund, the Asia-Pacific Economic Cooperation group, the International Atomic Energy Agency, and others. As signatories to global security agreements such as the Comprehensive Test Ban Treaty, the Nuclear Nonproliferation Treaty, and the Chemical Weapons Convention, Washington and Beijing share a mutual interest in their viability. In short, the United States would benefit from a China that not only accepted international norms but was also involved in crafting, monitoring, and assuring their implementation.

THE IDEOLOGICAL CHASM

Despite these common concerns, the United States and China fundamentally differ on such issues as globalization, democratization, state-citizen relations, and humanitarian intervention. Although these differences of opinion should not be exaggerated, they cannot be dismissed.

On the economic front, difficulties with China stem largely from its fundamental ambivalence about the benefits of globalization and open markets. Communist Party leaders fear American economic, political, and cultural dominance, especially because of the perceived vulnerability of China's transitional market economy. These views are slowly diminishing, but they may have gained ground from Zhu's inability to strike a final WTO deal during his visit to Washington despite significant Chinese concessions.

Although cooperation is possible on some security issues, the United States and China differ over the structure of the future world order. Beijing firmly opposes what it sees as Washington's troubling tendencies toward unilateral action. Like many other countries, China does not support U.S.-led interventions in hot spots such as Kosovo and Iraq and has expressed grave concern about the possibility of U.S. military action in North Korea. U.S. support for Taiwan through arms sales and political commitments is a constant source of tension. China's July 1998 white paper on national defense made a few none-too-veiled references to the United States, arguing that hegemonism and power politics remain the main threats to world peace and stability; that a Cold War mentality still prevails; and that the enlargement of military blocs and strengthening of alliances has added instability to international security.

The question of human rights in China comes closest to a true ideological divide between Washington and Beijing. The Chinese leadership strictly limits any organization's ability to challenge the ruling party. Beijing's crackdown on efforts to form an opposition party and its stepped-up surveillance of unauthorized religious activities are only the most recent manifestations of this consistent policy. In addition, China's judicial system remains arbitrary and often corrupt, with political prisoners usually receiving the worst treatment. The Western conviction that state power stems from the people rather than vice versa is an alien idea. Yet in the past, American administrations came to see human rights as a Chinese domestic issue, secondary to fundamental U.S. interests. Recently, however, humanitarian and security interests have become increasingly intertwined for the United States. China has watched American military involvement in the former Yugoslavia with growing concern, fearing what such a precedent may mean if and when China quells strife in the increasingly restive ethnic regions of western Xinjiang and Tibet or if China uses force to take Taiwan. The official Chinese news agency pulls no punches on this question, declaring that the U.S.-led NATO attacks against Yugoslavia are nothing but hegemonism under the pretext of humanitarianism.

The NATO bombing of the Chinese embassy in Belgrade exacerbates all the more China's long-simmering resentment over what it sees as abusive American unilateralism. Indeed, all that China opposes in the U.S.-led NATO action in Serbia -- American aggression, the trampling of state sovereignty, excessive force -- has been intensely magnified by the single action of destroying the Chinese embassy. This tragic event cuts to the very core of Chinese grievances with the current world order, illustrating U.S. dominance, highlighting China's relative weakness, and violating China's long and passionately held principle of noninterference in the internal affairs of other states.

The protests across China mixed elements of genuine popular outrage with a relatively well-managed government effort to allow venting and embarrass the United States. Although the angriest and most destructive responses in China have died down, the bombing's legacy will be felt in U.S.-China relations for years to come. The immediate effect has been the Chinese suspension of important channels of dialogue, such as in military relations, arms control discussions, and bilateral human rights talks. No doubt China will be all the more eager to have its voice heard in any U.N.-brokered settlement in Kosovo, which will probably drastically diminish U.S. and NATO involvement. In addition, those Chinese factions that support a more open and stable relationship with the United States will need to keep their heads down and rebuild confidence among hard-line skeptics. They might give up on the Clinton administration altogether, to await the 2000 elections.

Even if the immediate effects of the embassy bombing can be overcome, this event will be bitterly remembered long into the future and will haunt U.S.-China relations. American policymakers need only remember the abortive 1993 inspection of the Chinese ship Yinhe, suspected of carrying chemical-weapon materiel to Iran, which was a far less egregious U.S. interference in China's sovereignty and yet remains a constantly revisited sore spot.

MAKING HEADWAY

Given these areas of common and clashing interests, the United States clearly can neither trumpet a strategic partnership with China nor write off engagement as a failure. What is needed is a more nuanced, realistic, and clearly delineated road map to U.S.-China relations, with both short- and medium-term guidance and modest, realizable goals. Visible progress will do much to stabilize both the bilateral relationship and a U.S. domestic constituency in support of U.S.-China ties.

Given the poisoned atmosphere in the wake of the embassy bombing, Washington will need to focus on realizable goals with Beijing in three specific areas: integrating China into the WTO, maintaining stability in North Korea, and fostering greater social and political liberalization in China. Although other issues should be discussed, Washington cannot expect immediate change. Meanwhile, if it is serious about seeing progress in the U.S.-China relationship, the Clinton administration must devote far more domestic political capital to garnering broad public support.

In economics and trade, the administration should focus on reaching a fair and commercially viable deal with China on WTO entry. After years of Chinese recalcitrance, Zhu offered major last-minute concessions in April. Although politically clumsy, the administration's salvage efforts this spring are steps in the right direction. Once agreement is reached, the next tasks will be to work with Beijing to fully implement China's WTO commitments and assure subsequent entry for Taiwan as soon as possible.

Other economic problems will persist over the long term and should be the subject of more intense discussions once WTO accession is resolved. Redressing the bilateral trade deficit will follow naturally from China's WTO obligations. But the basic trade asymmetries between the two countries ensure that the U.S. trade deficit with China is unlikely to decline appreciably. More important, the two sides must promote China's smooth transition to a more open, stable, and accountable economic system, grounded in the rule of law and free-market principles. At the same time, the United States can cooperate with China in fixing its latent economic problems -- declining government revenues, a fragile banking system, corrupt business practices, growing unemployment, and vast swaths of debt-ridden industrial giants -- to ensure that China does not spiral uncontrollably into deeper structural problems.

As for immediate security issues, Washington and Beijing should intensify their efforts to secure the stability of the Korean peninsula. Such joint diplomacy should include resolving questions about Pyongyang's nuclear program, persuading the North to halt further missile testing, and coordinating humanitarian relief. As members of the Four Party Talks on Korean security, the United States and China should continue their cooperation in dissuading North Korea from obstructing progress or bolting from the process altogether. The talks remain one of the most important channels to diffuse tensions between North and South Korea, a near-term interest that Washington and Beijing share. China and the United States must reassure North Korea that although regime collapse is not their intention, regime reform certainly is. Regarding eventual Korean reunification, however, the United States should remember that China's interests may diverge from its own. China may favor an indefinite division of the peninsula, probably prefers to see Korea come within its sphere of influence, and will likely oppose the maintenance of U.S. troops in a unified Korea.

In other security areas, greater long-term difficulties arise. U.S. moves to proceed with theater missile defense in cooperation with others in East Asia -- Japan, South Korea, and Taiwan -- are increasingly understood in Beijing as politically motivated efforts to confront and contain China over the long term. The new findings from the Cox congressional committee will force a critical re-evaluation of U.S. high-tech trade with China. Congress will urge stricter limits on this aspect of U.S.-China ties, possibly advocating increased post-shipment and end-use verification for sensitive items exported to China. On the positive side, the Cox report should foster a more constructive debate about high-tech trade and U.S. relations with China. On the negative side, the troublesome revelations in the report may simply lead to more finger-pointing and deeper cynicism about ties to China. Narrowing differences with China on these issues will take time and will be difficult.

Taipei is the most important security issue dividing Washington and Beijing. Despite President Clinton's public statement a year ago of Washington's long-standing "three no's" policy toward Taiwan -- no support for Taiwan independence, no support for a two-China policy, and no support for Taiwan's membership in international organizations on the basis of statehood -- China perceives a gradual strengthening of U.S.-Taiwan ties. Indeed, Taiwan's status as one of the world's largest free-market economies and as an emerging democracy sharply contrasts with China, encouraging U.S. support for a fortified relationship with Taiwan. Beijing thinks that such developments violate U.S. pledges and obstruct eventual reunification by encouraging Taiwanese recalcitrance. But the status quo on which U.S.-China understandings were based 25 years ago is eroding, and Washington and Beijing need to think innovatively to reach a more appropriate modus vivendi. For the United States this means firmly clarifying the U.S. commitment to provide for the defense of Taiwan and the critical U.S. interest in a peaceful resolution of differences across the Taiwan Strait. This dispute holds the greatest potential for war between the United States and China. The two sides must work patiently to avoid this outcome.

Over the next year, the United States and China can expand their nascent efforts at greater political liberalization in China, particularly in introducing the rule of law and grassroots elections. A narrowly defined understanding of human rights overlooks important changes in China. The Chinese leadership recognizes that its legitimacy rests on continued economic prosperity, which is increasingly under pressure as reforms expose more economic ills. But Beijing has also begun to see the need to provide people with more than just economic goods. Pragmatic policymakers understand the importance of strengthening legal institutions both to regulate business practices and to manage civilian complaints against the state. The tens of thousands of village elections taking place across China represent democratic progress practically unthinkable just a few years ago. It would go too far to say that China's leadership accepts President Clinton's assertion that stability can no longer be bought at the expense of liberty, but Zhu's acknowledgment of Chinese human rights problems during his April visit marked a small but important step.

The abuse of political liberties in China will continue for the foreseeable future, and the U.S. government must continue to speak out candidly. But the United States should recognize that changing this area is a long-term process. Frustrations with progress on human rights should not preclude other advances.

DOING THE HOMEWORK

As every president since Nixon has discovered, U.S.-China relations require sustained care and feeding, not only to build the bilateral relationship but to encourage public support. U.S. policymakers must work far harder at cultivating a strong domestic consensus behind stabilized U.S.-China relations. It must become a regular aspect of the administration's public pronouncements. Major speeches on China by top White House officials should not occur only at summits.

One of the most important public-diplomacy tools would be regular, institutionalized, high-level meetings between China and the United States. The next time a U.S. president goes to China will be 2001 at the earliest -- an odd way for two key powers to do business and a virtual guarantee of exaggerated expectations and politicized disappointments. The two countries should view yearly summits as the norm, not as diplomatic prizes or expressions of "strategic partnerships." If presidential summits prove difficult, other regular channels should be stepped up. A vice president-premier set of meetings akin to the Gore-Chernomyrdin commission could tackle less-sensitive issues like energy resources, environmental conservation, information technology, transportation infrastructure, and disease prevention.

Second, consensus-building demands greater consultation between Congress and the administration on China policy. The two sides can strengthen mutual confidence through improved communication on key issues such as managing the military-to-military relationship, assuring the security of scientific exchanges involving the nuclear laboratories, and strengthening U.S. capacity to control sensitive technology exports to China. The administration and Congress need to coordinate policy better and be clear with one another about realistic expectations. Of course, building domestic support for a more stable U.S.-China relationship is difficult in the poisoned political atmosphere surrounding the field. Much of what passes for China policy in Washington is either over-the-top attack or timid damage control. This rhetoric is barely reasonable even from a domestic political calculus and is utterly irresponsible in light of the considerable U.S. interests at stake. Short-term, politically motivated, and divisive decisions on China weaken Washington's ability to deal effectively with Beijing.

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U.S. leaders must speak realistically and candidly about this country's interests and the strengths and the weaknesses of the U.S.-China relationship. At a minimum, new China policy should contain more realism about the future relationship with Beijing: neither a full-fledged containment strategy nor a wholehearted embrace, but a clear-headed mix of engagement and hedging -- a limited engagement. President Clinton's recent remarks about China -- that America has to work for the better future it wants even as it remains prepared for any outcome -- suggest a step in the right direction.

When U.S. interests are strongly and consistently conveyed and U.S. policy openly acknowledges not just America's shared concerns with China but also its strategic differences, confidence in engagement will increase and more domestic constituencies will get behind it. Moreover, Chinese leaders will better understand the U.S. perspective on both the opportunities and limits of engagement, making the chances of bitter disillusionment less likely. This approach should not overexaggerate China's power -- an all-too-common tendency that is not only divisive at home but grants to China psychological leverage it can exploit in diplomatic discourse.

For the past decade and more, the two critical factors for a successful U.S. China policy -- an understanding with China about strategic interests and differences and a domestic consensus in support of that understanding -- have proven elusive. In the United States, this has been due to political constraints, policy drift, and most recently, unrealistic expectations. But China's political, economic, and military growth is becoming ever more apparent. U.S. foreign policy leaders must soon bring greater stability and domestic consensus to China policy. A Chinese proverb says that even a 10,000-mile journey begins with one step. The United States had best get off on the right foot, and the sooner the better.